Influencer marketing has gone from being just a buzzword to an effective and widely used marketing strategy for businesses of all sizes. Even though the term is relatively new, the concept of influence has always been a major factor in decision-making. You’re more likely to purchase something if someone you trust, admire or respect gives a positive impression about it. With access to the internet, people now read and watch reviews while considering purchasing something. An influencer is someone who has the ability to impact your decisions, further, a social media influencer does the same using social media.
The Influencer Marketing industry is growing every year, and it’s projected to grow even further. The INCA-e4m Influencer Marketing Report 2022 states that:
The Influencer Marketing industry in India is worth INR 1250 Cr and is predicted to reach INR 2800 Cr in 2026.
54.9 million people are direct consumers of social media influencers across urban India.
⅔ of the digitally active population in India follows at least one social media influencer.
Fashion, e-tail, F&B, entertainment and fitness use Influencer Marketing the most profitably.
People between the ages of 45-55 are most likely to purchase on the basis of influencer recommendations.
The History of Influencer Marketing
Influencer Marketing is here to stay, but how did we get here?
The Ancient Influencers
When we think of modern influencers, we think of social media. But if we take a look back, historians have suggested that in Ancient Rome, gladiators would often endorse products like olive oil and wine. Entrepreneurs would use gladiators’ celebrity status to influence purchasing behaviour. You could call them early influencers.
The Royal Influencers
In 1760, English potter, Josiah Wedgwood, was Queen Charlotte of Mecklenburg-Strelitz’s favourite craftsman, and he convinced the royal family to allow himself to be branded as “Potter to her Majesty”, which allowed him to attract high-profile customers. The Royal Warrant of Appointment were seals given to companies that supplied goods to the royal family. Currently, there are over 800 seals given out to companies; however, some companies, like After Eight, have removed it from their packaging. The royal family can be seen as a symbol of archaic elitist ideologies, and brands have been distancing themselves from it.
The Fictional Influencers
In 1932, Coca-Cola used the happy and jolly image of Santa Claus to promote their beverage. This led to an increase in their sales even though it was the great depression. Coca-Cola capitalised on the happiness evoked through his imagery and even branded Santa Claus in the same red colour as their brand.
The Celebrity Influencers
Celebrity endorsements are still extremely popular. A great example is Michael Jordan and Nike, the Air Jordan line of shoes. Their partnership with Jordan has consistently been a huge source of revenue for the company. Sponsoring celebrities also has a huge impact on public perception of the brand and the product. In 1927, Rolex sponsored Mercedes Gleitz, the first woman to swim across the English Channel. She wore the watch for the swim, spending more than 10 hours in the water, and when she finished her feat, the watch was still in perfect condition. Though celebrities can improve a brand image, customers know that these celebrities are paid to talk about the product and lack any authenticity.
The First Social Media Influencers
The influencers as we know and understand them today, came from reality TV. Stars of Keeping Up with the Kardashians and Jersey Shore rose to fame at the same time as the creation of Instagram. They used social media as a way to communicate and engage with the fans, unlike other celebrities who led more private lives. They often posted pictures and videos to give the audience a peek into their lives. They soon monetised their influence by promoting brands. These influencers sold a lifestyle of extreme wealth and excess. Though these celebrities seemed more authentic and approachable, they led such different lives, distanced from the ‘regular’ people.
The Modern Day Influencer
Celebrities had the upper hand when social media began because of their preexisting fame; ‘regular’ people have now caught up. Anyone can be a social media influencer now. Since the barrier to entry is very low, people can garner a following through creating engaging content and interaction with their audience. The audience follows these influencers for their personality, creativity and authenticity. Companies leveraged this newfound trust to give influencers free products or pay them to promote their brands. This is what we now call Influencer Marketing.
The Rise of Influencer Marketing
We’ve understood how influencer marketing has evolved, but what is it about us humans that makes Influencer Marketing so effective?
As social beings, word of mouth is a fundamental aspect of human nature. Influencers are able to scale this word of mouth to the masses. Since we live more and more on the internet, these influencers become an integral part of our lives. There are 400 million Indians on social media, and reports suggest that 1/4th of all social media users will be from India. With more people’s attention on social media, the impact of influencers keeps increasing.
Local apps like Josh and Moj, along with international apps like YouTube and Instagram have created popular Short Form Video sharing platforms. People have begun to consume more and more and more SFV. With all these platforms requiring the same video aspect ratio, people are able to make one video and share it on multiple platforms. Companies have also realised many people use AdBlockers and don’t end up seeing the digital ads they’ve paid for. Most people who end up seeing the ad often try to skip it as soon as possible on social media.
By using influencers, companies are able to reach their target audience. The key factors as to why influencers are valuable assets to companies are their engagement with the followers and the trust the followers have in them. Companies are also realising how it’s becoming a more practical way to market to their audience. To truly understand the cost-effectiveness of influencer marketing, we need to understand the cost of traditional marketing. A simple 30-second video advertisement costs money in each step of ideation, production and distribution. An influencer could come up with an idea themselves that best suits their audience, they shoot the videos themselves as they already have the equipment, and they use their already existing channel for distribution, making the overall process more cost-effective.
Effectively Using Influencer Marketing
Influencer marketing is not as simple as finding an influencer with a mass following and collaborating with them. All influencers are not the same. Their follower base categorises them into Nano (1K-10K followers), Micro (10K-50K followers), Mid-Tier (50K-500K), Macro (500K-1M followers) and Mega (1M+ followers). Then, their content, region and language put them in different categories with a unique audience base. Here are a few things to keep in mind while creating an impactful influencer marketing campaign:
The Right Match
It makes more sense to collaborate with a fashion or beauty influencer if you’re a fashion or lifestyle brand. Similarly, you need to understand your brand and find influencers who will genuinely understand and appreciate your product. A collaboration with the wrong influencer can seem inauthentic, which in turn is negative for both the brand and the influencer.
Bigger isn’t Always Better
While Mega and Macro influencers have a bigger reach, don’t underestimate Micro and Nano influencers’ connection to their audience. Though they have a smaller follower base, these influencers are able to have a closer relationship to their followers, who have more trust in them. Micro and Nano influencers also charge less and allow you to hire multiple influencers to target specific audiences.
Long Term Investment
Similar to how the influencers maintain a good relationship with their followers, brands should look to foster a long-lasting relationship with their influencers. A good working relationship helps both the brand and the influencer.
Regional > National
India is a country with multiple languages. Having a nationwide campaign might not have the same effect as it does in other countries. Influencers have their own audiences in different regions and can have more impact on people who speak the same language. Influencers allow brands to target an audience that they might not have been able to reach.
All that Glitters isn’t Gold
It always sounds better to say you’re working with a Bollywood celebrity that everyone has heard of rather than an influencer who is comparatively less popular. A big-budget nationwide campaign with a huge star might not always be the smartest option. Influencer marketing provides a cost-effective way to reach an audience that traditional media might not be able to.
Return of Live Shopping
Live commerce is a throwback to teleshopping for the modern consumer. Using influencers, it’s able to mix entertainment and commerce. The success of this can be seen in developed countries and India is slowly adopting it as well. Virtual Reality and Augmented Reality technologies along with influencers could really help the potential of live commerce in the future.
Future of Influencer Marketing
Influencer marketing looks like it’ll keep growing in the future, and looking back at the past, we know it’s going to change at some point. With improvements in VR and AR technology along with the popularisation of AI, they’re sure to have an impact. Though not mainstream, virtual influencers are already here. Virtual influencers are computer-generated characters, created and managed by their owners. They appear like real humans and have their own characteristics and personalities.
Fashion brands like Balmain, Prada and Balenciaga have already begun collaborating with virtual influencers. Car manufacturer Renault has their own virtual ambassador named Liv, who promotes their brand. The most popular virtual influencer, Lu do Magalu, with millions of followers on multiple platforms, was created by Brazilian mega-retailer Magazine Luiza, to promote their products. Similar to the fictional influencer, the virtual influencer can be created like a brand mascot, but with the help of advanced technology, they are able to have a thriving life on social media. Will virtual influencers be just another novelty, or will it grow? We’ll have to wait and see what the future holds.